... We expect the electric bikes to be here in early summer, at which time they will be available through independent Schwinn bike dealers all over the US.

Do you mean summer of 2007? (i.e. are they not available yet?)

[Apparently they weren't, but as of August, from their website, it looks like they are.]

We live in a hilly area - what is the recommend max. grade, for the electric Schwinns?(for the UrbanMover electric bikes it's up to 12%10-14%, for the Giant Suede electric bike IIRC it's up to 15%)

We don't have a specific grade recommendation...

If you take the bike up steeper-than-recommended hills, what are the consequences - do you merely get temporarily reduced power...?...but requiring the battery to power extra work like climbing a steep grade will shorten the distance it can travel on that charge.

Can this damage the motor?I'm sorry, but I don't yet have a definitive answer for that question.

Does the battery sit on top of the rack behind the seat?What are its dimensions (of battery plus whatever it's contained in, if anything)?The battery is integrated with the rear rack, but is relatively small and easily removable through a simple plug-in system.(update: from this Engadget post, looks like the battery fits under the rack)